Merging of 2 private limited companies
This query is : Resolved
18 November 2014
our company is going to merge with sister concern. i wanted to know how to calculate both directors share holdings and on which basis....
18 November 2014
There are 2 methods.
01. Based on the market value of the net assets
02. Market value of the shares.
Since this is a private company the second option is not available.
Based on this, decide the exchange ratio so that you will be able to find out the holding.
01. Based on the market value of the net assets
02. Market value of the shares.
Since this is a private company the second option is not available.
Based on this, decide the exchange ratio so that you will be able to find out the holding.
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19 November 2014
Thank you sir.
But can explain me with example. so i can understand much better as per companies situation.
But can explain me with example. so i can understand much better as per companies situation.
19 November 2014
In fact, what I would suggest is, NOW you give the figures, so that we can go ahead with "market value" method.
20 November 2014
FOR EXAMPLE: 2 COMPANIES
ABC, XYZ
SHR.CAP 68.41, 50.00
RESERV & SURPLUS 477.65, 13.82
LONG TERM BORR. 245.11, 0.64
DFRD TAX 1.06, -
SHORT TERM BORR. 62.75, 248.70
TRADE PAYABLE/PROV. 125.00, 0.63
OTHER/CUR/LIAB. 42.75, 45.55
ASSETS:
FIXED ASSTS 763.76, 289.53
LONG TERM LAONS/ADV 4.75, 3.86
OTHER NON-CUR.AST - , 2.50
STOCK 111.44, 5.25
DEBTORS 99.79, 57.68
CASH 20.13, 0.51
SHRT TERM LOANS/ADV 20.75, -
FOR EXAMPLE: 2 COMPANIES
ABC, XYZ
SHR.CAP 68.41, 50.00
RESERV & SURPLUS 477.65, 13.82
LONG TERM BORR. 245.11, 0.64
DFRD TAX 1.06, -
SHORT TERM BORR. 62.75, 248.70
TRADE PAYABLE/PROV. 125.00, 0.63
OTHER/CUR/LIAB. 42.75, 45.55
ASSETS:
FIXED ASSTS 763.76, 289.53
LONG TERM LAONS/ADV 4.75, 3.86
OTHER NON-CUR.AST - , 2.50
STOCK 111.44, 5.25
DEBTORS 99.79, 57.68
CASH 20.13, 0.51
SHRT TERM LOANS/ADV 20.75, -
21 November 2014
That is fine. Now find out the MARKE value of the ASSETs of both the companies.
22 November 2014
Barring certain assumptions as to the taste and choice of the shareholders, this can be now worked out as the EXCHANGE RATION. (A rounding off is normally done in order to avoid the tedious calculations)Next difficulty in this regard please?
22 November 2014
Thank you so much for your prompt replies and your suggestions.
22 November 2014
You are most welcome. Any further query in this, you may send e mail to amolshankar@gmail.com
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